The Influence Of Cognitive Resource And Decision Strategies On Framing Effects

Risk preference is not established in advance but creating in process of judgment and decision making, which is proved by framing effects. Based on dual-process model of decision making (Stanovich&West,2000; Sloman,2002), people have two systems for decision making:one fast, automatic, and heuristic based and sensitive to context cues(system1), and the other slower and analytic(system2). System1will be used when there is not enough cognitive resource, otherwise system2will be used. Therefore, framing effects will be observed when there are not enough cognitive resources. On the contrary, framing effect will decrease or even not be observed when there are enough cognitive resources. Research about decision strategies predict what is going on about mentioned above. Decision makers use less information when there are not enough cognitive resources (Ben-Zur,1998; Vlaev etal.,2011).It is the frame that determines what is chosen to compare in the situation. Specifically, decision makers compare the difference of Maximum benefit in the negative frame which causes he to pursue risk. On the contrary, he will compare the difference of Minimum in the positive frame which causes he to avoid risk (Li,2000). Decision makers use more information if they have more cognitive resources and try to compare and weight both the differences of Minimum and Maximum benefit,which make them have more consistent risk preference. The first research examines the influence of cognitive resources(in terms of need for cognition and depth of information process) on framing effects in four situations. The aim of second research explores whether the influence of interaction between frames and cognitive resources(in terms of depth of information process) on risk preferences is mediated by decision strategies in two situations.The result indicated that:(1) Frames influence risk preference in the program of Poverty alleviation and Employment in the sense that decision makers pursue risk in the negative frame but avoid risk in the negative frame. But we don’t get the same conclusion in the program of Life support and Real estate. Specifically, participants pursue risk in the first program but avoid risk in the second one.(2) Compared to the participants who process information not deeply, those process information deeply are influenced less by the frames,which means they have more consistent risk preference in the program of Poverty alleviation and Employment.(3) Compared to the participants low in need for cognition, those high in need for cognition are influenced less by the frames,which means they have more consistent risk preference in the program of Poverty alleviation and Employment.(4) Participants are more involved in the program of Life support than in Employment program. Those high involved in the decision situation are less influenced by the frames than those low involved which means the former have more consistent risk preference.(5) Both frames and depth of information process influence the use of decision strategies. Those process information deeply focus less on difference of Minimum benefit in the positive frame but more on it in the negative frames than those process information not deeply. On the contrary, Those process information deeply focus more on difference of Maximum benefit in the positive frame but less on it in the negative frames than those process information not deeply.(6) Risk preference is influenced by decision strategies. Decision maker are more likely to avoid risk when they focus on the difference of Minimum benefit and are more likely to pursue risk when the focus on difference of Maximum benefit.